"Special tax treatment in respect of investment in house property, land and motor vehicles has to stop," the CPD said in its budget proposals that include more than 100 suggestions.

The suggestions are made under seven heads -- general fiscal measures, export-import, social sector, price support for producers and consumers, regional development and sectoral measures, needs of the marginalised and restructuring tax administration.

The CPD said in view of regional disparity in three divisions of Rajshahi, Khulna and Barisal, the government may consider introducing a Rural Employment Guarantee Scheme. This scheme may seek to provide guaranteed employment to one member of every household below a threshold income level for at least 100 days a year, especially in the lean (Monga) season. The minimum wage could be Tk 100 per day. Technical experts can draw plans for individual villages in consultation with local leaders, elected representatives and community leaders. Local government along with NGOs may be involved in implementation of this programme. This scheme will be particularly suitable for Monga affected areas, and could be implemented in phases, it recommended.

The CPD said taking note of the current drive against corruption and with a view to raising revenue intake on a sustained basis, a scheme involving voluntary disclosure of untaxed income may be introduced under certain conditions for a limited period.

"Untaxed income may be declared at the highest applicable rate for the corresponding category of assessee plus 5 percent penal charge. The declared income must be embodied in investments in properties, productive capacity or liquid/semi liquid forms."

"This proposed scheme for disclosure may be available for a period not exceeding 90 days. These provisions will not absolve anybody from legal actions if the source of income is later revealed to be illegal. Such cases will be dealt under existing legal provisions for criminal offences," the CPD added.

Finance Adviser Mirza Azizul Islam at a meeting on May 16 said the government may introduce a provision for whitening black money, but the offer may be made through alternative measures, not the upcoming national budget.

"Instead of keeping the provision in the budget, alternative measures might be offered to whiten black money," he said.

The CPD said tax exemption limit may be revised upward to Tk 150,000 from the existing Tk 120,000 considering the rise in living expenses since it was re-fixed two years back in FY06 from Tk 1,00,000 to Tk 1,20000.

It proposed further enhancement of the scope and coverage of the Large Taxpayers' Unit (LTU).

The CPD further said tax holiday facilities have to be replaced with accelerated depreciation allowance. With a view to encouraging setting up of industries in less developed regions including Chittagong Hill Tracts, additional concessional rates may be considered for these areas, it proposed.

"The corporate tax slab applicable may be extended in the cases of banks and insurance companies (45 percent) to other high profit making service industries such as mobile telephone companies. Alternatively, the cell phone companies will have to enlist themselves in the stock market to avail lower tax rate," it continued.

The CPD said zero rate of duty should be abolished, other than in cases where international treaty or obligations exist or strong humanitarian reasons prevail, or where it is necessary to reduce tariff to stabilise market price.

"Dispersions of duty rates must be enhanced within 4-digit tariff heads. Supplementary duty may be enhanced on high-value vehicles and other items generally used by the richer segment of the society," it recommended.

It suggested that concessional import duty on raw materials for major export industries and also for industries having export potential may continue. "All dyes, chemicals and other raw materials used in textile sector may not have more than 5 percent import duty."

For providing incentives to the backward linkage domestic textile sector and enhancing competitiveness of the apparels sector in the international market, the existing 5 percent cash incentive may continue, it said.

It also said to develop and strengthen backward linkage textile industry and the country's traditional jute industry, a Technology Upgradation Fund may be introduced, perhaps with an allocation of Tk 100 crore. "Credit provided under this scheme on concessional rates of interest will assist the industries to undertake technological restructuring initiatives, modernise their plants through installation of new machines and state-of-the-art technologies," it observed.

The CPD said the coverage of the Equity Entrepreneurship Fund (EEF) may be expanded beyond agriculture and IT-related projects. It may cover other potential areas, such as light engineering, plastic, melamine, electronics. The allocation may be enhanced from Tk 200 crore to Tk 300 crore.

It recommended that customs duty on newsprint may be reduced to 10 percent from 25 percent. The effective tax rate on newsprint is currently 48.75 percent.

It said to ensure SME sectors' access to credit facilities and considering high cost of financing and also with a view to providing encouragement to the banks and financial institutions, a Refinancing Scheme was introduced in the national budget for the FY07 with an allocation of Tk 100 crore. "The upcoming budget may continue this support with enhanced allocation for providing credit at concessional interest rate. The modus operandi of the SME Foundation may be reviewed."

The CPD said government needs to introduce zero tariff for selected essential commodities considering domestic price situation and international market price; this is more pertinent particularly for commodities whose import price is high (e.g. lentil).

Government needs to replace the existing ad-valorem tariff structure by 'specific duties' for selected essential commodities, it said. "Government may reduce or withdraw the high supplementary duty on certain commodities (e.g. currently 15 per cent for whole cream milk powder, crude soybean oil and crude palm oil)."

The government needs to provide subsidy directly to the farmers who are using diesel for irrigation, the CPD added.